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Match Group Inc. capitalized on a strong recovery in the U.S. to deliver better-than-expected revenue, even as the pandemic continues to dampen the dating scene in markets like India and Japan.
The company posted second-quarter net income of $140.9 million, or 46 cents a share, up from $74.9 million, or 36 cents a share, in the year-earlier quarter. Analysts tracked by FactSet were calling for 49 cents a share in GAAP earnings. Match’s
MTCH,
revenue rose to $707.8 million from $555.4 million, while analysts tracked by FactSet had been projecting $694 million.
Shares fell more than 3% in after-hours trading immediately following the release of the results. The stock closed Tuesday’s regular session with a 1.8% decline to $158.47, and has gained 4.8% so far this year, as the S&P 500 index
SPX,
has gained 16.8%.
“We are seeing a strong recovery in the U.S. and improvement in Europe as well, but important markets for us such as India, South Korea, Brazil, and Japan are further behind on the COVID recovery curve. Against this backdrop, our business is showing clear signs of strength, with more room to run as additional markets come up the vaccination curve,” Chief Executive Share Dubey and Chief Operating Officer Gary Swidler said in a letter to shareholders, in which they signed off by telling readers to “Enjoy the rest of the summer and Vax that Thang Up.”
The company had 15 million payers in the quarter, up from 13 million in the year-prior quarter. The payers metric is Match’s new way to quantify both subscribers and those purchasing a-la-carte features.
Tinder saw direct revenue growth of 26% in the second quarter and had 9.6 million payers, up 17%. Users are showing a greater willingness to pay up for features on the app, according to Match’s shareholder letter, though trends in North America and Western Europe are outpacing those elsewhere in the world.
The company continues to add new features to Tinder, including an area where members can see matches who share their interests and “low-stakes game” mode that lets daters chat before they formally match on the app.
For the third quarter, Match expects total revenue of $790 million to $805 million, including contributions from the Hyperconnect video brands that the company recently acquired. Looking to the full fiscal year, Match anticipates revenue of $3 billion to $3.025 billion. Analysts were expecting $756 million in revenue for the third quarter and $2.9 billion for the full year.
In discussing its earnings outlook for the full year, Match disclosed that the number “reflects an additional $15 million in the second half of the year for increased government relations costs associated with advocacy related to app store practices around the globe and for legal matters including the former Tinder employee litigation, which is currently scheduled to go to trial in November.”
